If you want to try your hand at DIY investing, the Robinhood app may be a good place to start, especially since you can trade stocks, ETFs and options commission-free. In this Robinhood app review, find out how the platform works, how it makes money and most importantly, what real users think to it.
Robinhood is an investing app that attracts all levels of investors. It’s possible to invest in over 5,000 stocks on Robinhood Financial through its mobile app and desktop application (Robinhood for Web).
Asset classes you can invest in include ETFs and most U.S. equities available on American Exchanges. Robinhood supports options and cryptocurrency trading, but you can’t invest in mutual funds, bonds, preferred stocks and most foreign exchanges (there are around 250 global stocks that are available, however).
What sets Robinhood apart from many other investing apps is that it doesn’t charge any fees for opening and maintaining your account, or for fund transfers or buying stock. However, you’ll incur a small fee from the Securities and Exchange Commission (SEC) or FINRA for sell orders for stocks, which is standard, regardless of which brokerage firm you’re using.
Robinhood’s “no fees” approach makes this app a popular choice for new investors who may not have much cash to invest, as well as experienced traders. With that said, beginner investors should note that there is no personalized advice on hand with the Robinhood app and no recommended portfolio to help get the ball rolling. Robinhood does, however, provide lots of website resources which explain about investing from the ground up.
If you decide to invest using the Robinhood app, you’ll be reassured to know that Robinhood Financial is a member of both the Security Investor Protection Corporation (SIPC) and FINRA, and they’re also registered with the SEC. This means that the securities in your account will be protected up to $500,000 (including $250,000 for cash claims).
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On Google Play, the app scores a respectable 4.6 / 5 in total and an even better 4.8 / 5 over in the App Store. Below you’ll find a snapshot of reviews from real users who have downloaded the mobile app and reviewed Robinhood’s service.
One recent glowing review on Google Play praises the amount of educational content provided by Robinhood to help inform and develop even the most inexperienced beginner, with the reviewer stating that the app was the best stock app he’d tried.
Another reviewer said that the app was worth trying if you’re curious about investing in stocks but don’t know where to start. Using Robinhood, you can learn the basics and get to grips with how trading works, investing small amounts, before you get serious.
Many other positive reviews follow a similar vein. There are a few reviews that reflect on the fact that several stock options aren’t supported by Robinhood Financial, which may be an issue for more experienced investors. The app itself appears to be easy to use, with many users claiming that its interface is simple and quick to load.
Some of the most recent negative reviews in both the App Store and Google Play relate to a common theme – poor customer service – with quite a few users reporting problems that they struggled to get resolved, purely because of a lack of response.
The customer service side of the app is an important consideration, particularly as it’s not possible to speak to a representative over the phone; only online support is available. If you’d prefer the safer option of being able to talk to a human, there are other investment apps around that offer this as standard.
If you’re wondering how Robinhood makes money when it offers zero-commission trades, here’s how. Robinhood provides a (riskier) premium margin account called Robinhood Gold, which starts at $6 per month. This account gives you access to Gold Buying Power; money that you borrow from Robinhood to buy stocks, without having to deposit funds from your bank account.
Additionally, Robinhood receives interest income, just like banks do, from uninvested cash held in their customer’s accounts.
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If you’re a DIY investor looking to trade commission-free, Robinhood is one app worth checking out. Robinhood makes trading stocks a cheap and viable option, and its intuitive mobile app means you can make trades at your fingertips, even when you’re out and about.
If you ideally want a hands-off approach to investing, or more guidance when choosing your investment strategy, take some time to explore other apps, such as Betterment or Wealthfront instead. Alternatively, a digital wealth manager like Personal Capital provides a comprehensive investment management service with solid customer support.
*The content in this article provides useful information about certain investment apps, but it doesn’t constitute professional financial or investment advice.
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